CEE MARKETS-Currencies firm, forint regains some of its losses as dollar slides

Credit: REUTERS/BERNADETT SZABO

Most Central European currencies firmed and the forint recouped some of its recent losses on Friday as the dollar slid after U.S. Federal Reserve chairman Jerome Powell announced a policy shift on inflation. [nL1N2FT0PR]

By Anita Komuves

BUDAPEST, Aug 28 (Reuters) - Most Central European currencies firmed and the forint recouped some of its recent losses on Friday as the dollar slid after U.S. Federal Reserve chairman Jerome Powell announced a policy shift on inflation.

The Hungarian forint EURHUF= weakened for two weeks and touched two-month lows in the previous session. On Friday it edged up 0.17% to trade at 355.88 per euro.

"Based on the technical picture I expect a correction in the EUR/HUF exchange rate which could firm back as far as 352.5," an FX trader in Budapest said.

"Macroeconomic data spoiled investors' mood lately but those numbers will get better in the next quarter. A lot will depend on the September inflation report of the central bank."

The currency broke away from its regional peers in mid-August as it came under pressure from dismal Hungarian GDP data, high inflation and loose monetary policy.

Inflation came in at a higher-than-expected annual 3.8% in July and GDP dropped by 13.6% year-on-year in Q2.

The Romanian leu EURRON= was little moved and trading at 4.8395 per euro ahead of a vote of no confidence against the government of Ludovic Orban on Monday.

The vote adds to years of political instability that have kept the currency under pressure.

"If the vote of no confidence was going to be successful this might put pressure on the leu, at least short term," Commerzbank said in a note.

"In this case Orban’s government will continue governing until the parliamentary elections in December, and as a result the effects on the leu are likely to be limited."

Elsewhere, the Czech crown EURCZK= firmed 0.1% and was trading at 26.260 versus the common currency. The Polish zloty EURPLN= firmed 0.17% to 4.4059 per euro.

Stocks in the region were mixed, with Prague's equities .PX up 0.25% and Budapest .BUX sliding 0.91%. Warsaw's index .WIG20 was down 0.28% while Bucharest's stock market .BETI edged up 0.03%.

CEE MARKETS

SNAPSHOT

AT 1052 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

EURCZK=

Czech crown

EURCZK=

26.2600

26.2850

+0.10%

-3.15%

EURHUF=

Hungary forint

EURHUF=

355.8800

356.5000

+0.17%

-6.95%

EURPLN=

Polish zloty

EURPLN=

4.4059

4.4132

+0.17%

-3.39%

EURRON=

Romanian leu

EURRON=

4.8395

4.8385

-0.02%

-1.06%

EURHRK=

Croatian kuna

EURHRK=

7.5250

7.5265

+0.02%

-1.06%

EURRSD=

Serbian dinar

EURRSD=

117.5000

117.6000

+0.09%

+0.06%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

.PX

Prague

.PX

906.15

903.8800

+0.25%

-18.78%

.BUX

Budapest

.BUX

35148.42

35470.36

-0.91%

-23.73%

.WIG20

Warsaw

.WIG20

1841.40

1846.50

-0.28%

-14.36%

.BETI

Bucharest

.BETI

8877.30

8874.51

+0.03%

-11.03%

.SBITOP

Ljubljana

.SBITOP

852.43

853.53

-0.13%

-7.93%

.CRBEX

Zagreb

.CRBEX

1614.16

1616.34

-0.13%

-19.99%

.BELEX15

Belgrade

.BELEX15

692.58

690.44

+0.31%

-13.61%

.SOFIX

Sofia

.SOFIX

430.27

430.86

-0.14%

-24.27%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

0.1350

-0.0470

+078bps

-4bps

CZ5YT=RR

5-year

CZ5YT=RR

0.6700

-0.0510

+130bps

-5bps

CZ10YT=RR

10-year

CZ10YT=RR

1.0260

-0.0260

+141bps

-5bps

Poland

PL2YT=RR

2-year

PL2YT=RR

0.1430

-0.0010

+079bps

+0bps

PL5YT=RR

5-year

PL5YT=RR

0.7950

0.0190

+143bps

+2bps

PL10YT=RR

10-year

PL10YT=RR

1.4180

0.0430

+180bps

+2bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.37

0.39

0.46

0.34

Hungary

HUFFRABUBOR=

0.77

0.86

0.93

0.62

Poland

PLNFRAWIBOR=

0.25

0.26

0.27

0.23

Note: FRA quotes

are for ask prices

**************************************************************

(Additional reporting by Jason Hovet in Prague. Editing by Carmel Crimmins)

((komuves.anita@thomsonreuters.com (+36 70 795 8815))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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